Gran Tierra Energy Inc. has completed the previously announced acquisition of PetroLatina Energy Ltd. for a purchase price of approximately $525 million, consisting of an initial payment of $500 million at closing, subject to closing adjustments, and a deferred payment of $25 million no later than December 31, 2016. PetroLatina is a private, independent exploration and production company with assets primarily in the Middle Magdalena basin of Colombia.
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "We are pleased that the Acquisition has closed quickly and we now look forward to developing the upside potential in our new core area in the prolific Middle Magdalena Basin. We have acquired significant proved, probable and possible reserves which we expect to enhance our long-term growth strategy and to be an excellent fit with Gran Tierra's current reserves and resources base in the Putumayo Basin."
The Acquisition was funded through a combination of cash on hand, borrowings under Gran Tierra's existing credit facilities, a new term loan, and the proceeds of a private placement of subscription receipts of the Company ("Subscription Receipts").
In connection with the Acquisition, Gran Tierra issued 57,835,134 Subscription Receipts priced at $3.00 per Subscription Receipt to certain institutional investors and certain directors and executive officers of Gran Tierra for aggregate gross proceeds of approximately $173.5 million. In accordance with their terms, each Subscription Receipt was exchanged for one share of common stock in the capital of the Company (the "Common Shares") and the proceeds of the Subscription Receipt financing were released from escrow on August 23, 2016. Holders of the Subscription Receipts are not required to take any action in order to receive the Common Shares. The Common Shares were issued in book-entry form using the direct registration system of Computershare Trust Company, N.A., Gran Tierra's transfer agent.
The Subscription Receipts were exchanged for Common Shares in reliance on the exemption from registration provided by Section 3(a)(9) of the U.S. Securities Act of 1933, as amended. This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities herein described, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
In connection with the Acquisition, Gran Tierra amended its existing credit facility to add a $130 million term loan with Scotiabank, as administrative agent, and each of the lenders in Gran Tierra's existing secured revolving credit facility, including Scotiabank, Natixis (New York Branch), Société Générale, HSBC Bank Canada, Royal Bank of Canada and Export Development Canada. This new term loan was used to fund a portion of the purchase price of the Acquisition.
